President Donald Trump moved the United States to the brink of a trade war with China, announcing tariffs on $50bn (R670bn) of Chinese imports that America's biggest trading partner has vowed to retaliate against.
China accused the United States of firing the first shot on Friday when the White House said that it would impose tariffs of 25% on $50 billion worth of Chinese goods.
The Chinese government said it would respond in kind to the USA tariffs, which will apply to roughly 1,100 exports and will target China's aerospace, robotics, manufacturing and auto industries.
Beijing will impose tariffs on 545 United States items worth $34 billion - including agricultural products, automobiles and seafood - starting on July 6.
China will impose duties with "equal scale, equal intensity" on imports from the U.S. and all the consensus the two sides reached earlier will lose effect, the Commerce Ministry said in a statement on its website yesterday.
Trump has threatened to hit China with duties on another $50 billion of goods if it retaliates. Although Pompeo was in Beijing to debrief the Chinese on the Singapore summit, the trade friction was never far from the surface.
US soybean futures plummeted earlier this week on fears that a trade war was brimming and China would follow through on its threat of a 25 percent soybean tariff. The second wave of Chinese tariffs will come later in the year, targeting another 114 goods worth $16 billion, including chemicals, medical equipment, and energy products like coal, crude oil, and gasoline.
Chinese media have mocked US President Donald Trump over plans to impose 25% tariffs on $50bn worth of Chinese goods, saying "wise men build bridges but fools build walls".
"China has noticed the U.S. statement which said Washington would continue to impose additional tariffs if China takes retaliatory measures". The list will contain 800 product categories, down from 1,300 previously. Trump has been unmoved by a Chinese offer to buy an additional $70 billion worth of USA farm and energy products and other goods, according to people familiar with the matter. Earlier, in mid-May, the U.S. and China had announced a cease-fire after two rounds of trade negotiations. "This move is not only damaging bilateral interests but also undermining the world trade order".
The immediate impact of tariffs on US growth is expected to be relatively small, but economists warn a prolonged trade war could damage business investment and consumer confidence.
China says its tariffs mirror the American ones.
"As I have said before, in a so-called trade war, driven by reciprocal increases of import tariffs, nobody wins", she said. A set of retaliatory tariffs released Friday by China includes a plan to tax American lobster exports, potentially jeopardizing one of the biggest markets for the premium seafood. Levies are scheduled to take effect for roughly 800 of those products on July 6, while the remainder could face tariffs pending a final decision by the trade office.
"We deeply regret that the United States has disregarded the consensus formed. and provoked a trade war".